EU promises to help dairy farmers

The European Union's farm chief has promised 280 million euros for a special milk fund to ease pressure on dairy farmers, suffering from the impact of the world recession.

EU Agriculture Commissioner Mariann Fischer Boel says she was forced to 'empty her pockets' to meet the demands of the majority of EU member states and thousands of protesting farmers, who have been spraying milk on to fields.

Dairy farmers say milk costs more to produce than they can sell it for.

The BBC reports the funds will be drawn from the bloc's 2010 budget.

Last month, the EU announced it would change EU state aid rules to let member states pay each farmer up to 15,000 euros in temporary aid.

That decision followed the dumping by Belgian farmers of three million litres of milk on fields.

French and German farmers have also dumped milk and blocked deliveries in frustration at the low prices for dairy produce.

Farmers say they want the EU to freeze planned increases in production quotas, because boosting the supply on the market lowers prices further.

2015 Deadline

The EU plans to phase out milk quotas by 2015 and to limit market intervention that supports prices, with a view to scrapping it in the long term.

The commission plans to extend EU special purchases of butter and skimmed milk powder to at least February next year, to help farmers.

The European Parliament has backed the plan, but wants it to include cheese too.